Vladimir Ilyich Lenin

Imperialism, the Highest Stage of Capitalism

A POPULAR OUTLINE

IV. EXPORT OF CAPITAL

Typical of the old capitalism, when free competition held
undivided sway, was the export of goods. Typical of the latest
stage of capitalism, when monopolies rule, is the export of
capital.

Capitalism is commodity production at its highest stage of
development, when labour-power itself becomes a commodity. The
growth of internal exchange, and, particularly,
of international
exchange, is a characteristic feature of capitalism. The uneven
and spasmodic development of individual enterprises, individual
branches of industry and individual countries is inevitable
under the capitalist system. England became a capitalist country
before any other, and by the middle of the nineteenth century,
having adopted free trade, claimed to be the “workshop of the
world”, the supplier of manufactured goods to all countries,
which in exchange were to keep her provided with raw
materials. But in the last quarter of the nineteenth century,
this monopoly was already undermined; for other countries,
sheltering themselves with
“protective” tariffs, developed into independent capitalist
states. On the threshold of the twentieth century we see the
formation of a new type of monopoly: firstly, monopolist
associations of capitalists in all capitalistically developed
countries; secondly, the monopolist position of a few very rich
countries, in which the accumulation of capital has reached
gigantic proportions. An enormous “surplus of capital” has
arisen in the advanced countries.

It goes without saying that if capitalism could develop
agriculture, which today is everywhere lagging terribly behind
industry, if it could raise the living standards of the masses,
who in spite of the amazing technical progress are everywhere
still half-starved and poverty-stricken, there could be no
question of a surplus of capital. This “argument” is very often
advanced by the petty-bourgeois critics of capitalism. But if
capitalism did these things it would not be capitalism; for both
uneven development and a semi-starvation level of existence of
the masses are fundamental and inevitable conditions and
constitute premises of this mode of production. As long as
capitalism remains what it is, surplus capital will be utilised
not for the purpose of raising the standard of living of the
masses in a given country, for this would mean a decline in
profits for the capitalists, but for the purpose of increasing
profits by exporting capital abroad to the backward
countries. In these backward countries profits are usually high,
for capital is scarce, the price of land is relatively low,
wages are low, raw materials are cheap. The export of capital is
made possible by a number of backward countries having already
been drawn into
world capitalist intercourse; main railways have
either been or are being built in those countries, elementary
conditions for industrial development have been created,
etc. The need to export capital arises from the fact that in a
few countries capitalism has become “overripe” and (owing to the
backward state of agriculture and the poverty of the masses)
capital cannot find a field for “profitable” investment.

Here are approximate figures showing the amount of capital
invested abroad by the three principal
countries[1]:

CAPITAL INVESTED
ABROAD(000,000,000 francs)

Year

Great Britain

France

Germany

1862.....

3.6

—

—

1872.....

15.0

10 (1869)

—

1882.....

22.0

15(1880)

?

1893.....

42.0

20(1890)

?

1902.....

62.0

27-37

12.5

1914.....

75-100.0

00

44.0

This table shows that the export of capital reached enormous
dimensions only at the beginning of the twentieth
century. Before the war the capital invested abroad by the three
principal countries amounted to between 175,000 million and
200,000 million francs. At the modest rate of 5 per cent, the
income from this sum should reach from 8,000 to 10,000 million
francs a year—a sound basis for the imperialist
oppression and exploitation of most of the countries and nations
of the world, for the capitalist parasitism of a handful of
wealthy states!

How is this capital invested abroad distributed among the
various countries? Where is it invested? Only an
approximate answer can be given to these questions, but it is
one sufficient to throw light on certain general relations and
connections of modern imperialism.

DISTRIBUTION (APPROXIMATE) OF
FOREIGNCAPITAL IN DIFFERENT PARTS OF THE
GLOBE(circa 1910)

Great Britain

France

Germany

Total

(000,000,000 marks)

Europe..........

4

23

18

45

America..........

37

4

10

51

Asia, Africa, and Australia......

29

8

7

44

Total........

70

35

35

140

The principal spheres of investment of British capital are the
British colonies, which are very large also in America (for
example, Canada), not to mention Asia, etc. In this case,
enormous exports of capital are bound up most closely with vast
colonies, of tile importance of which for imperialism I shall
speak later. In the case of France the situation is
different. French capital exports are invested mainly in Europe,
primarily in Russia (at least ten thousand million francs). This
is mainly loan capital, government loans, and not capital
invested in industrial undertakings. Unlike British colonial
imperialism, French imperialism might be termed usury
imperialism. In the case of Germany, we have a third type;
colonies are inconsiderable, and German capital invested abroad
is divided most evenly between Europe and America.

The export of capital influences and greatly accelerates the
development of capitalism in those countries to which it is
exported. While, therefore, the export of capital may tend to a
certain extent to arrest development in the capital-exporting
countries, it can only do so by expanding and deepening the
further development of capitalism throughout the world.

The capital-exporting countries are nearly always able to obtain
certain “advantages”, the character of which throws light on the
peculiarity of the epoch of finance capital and
monopoly. The
following passage, for instance, appeared in the Berlin review,
Die Bank, for October 1913:

“A comedy worthy of the pen of Aristophanes is lately being
played on the international capital market. Numerous foreign
countries, from Spain to the Balkan states, from Russia to
Argentina, Brazil and China, are openly or secretly coming into
the big money market with demands, sometimes very persistent,
for loans. The money markets are not very bright at the moment
and the political outlook is not promising. But not a single
money market dares to refuse a loan for fear that its neighbour
may forestall it, consent to grant a loan and so secure some
reciprocal service. In these international transactions the
creditor nearly always manages to secure some extra benefit: a
favourable clause in a commercial treaty, a coating station, a
contract to construct a harbour, a fat concession, or an order
for
guns.”[2]

Finance capital has created the epoch of monopolies, and
monopolies introduce everywhere monopolist principles: the
utilisation of “connections” for profitable transactions takes
the place of competition on the open market. The most usual
thing is to stipulate that part of the loan granted shall be
spent on purchases in the creditor country, particularly on
orders for war materials, or for ships, etc. In the course of
the last two decades (1890-1910), France has very often resorted
to this method. The export of capital thus becomes a means of
encouraging the export of commodities. In this connection,
transactions between particularly big firms assume a form which,
as
Schilder[3]
“mildly” puts it, “borders on
corruption”. Krupp in Germany, Schneider in France, Armstrong in
Britain are instances of firms which have close connections with
powerful banks and governments and which cannot easily be
“ignored” when a loan is being arranged.

France, when granting loans to Russia, “squeezed” her in the
commercial treaty of September 16, 1905, stipulating for certain
concessions to run till 1917. She did the same in the commercial
treaty with Japan of August 19, 1911. The tariff war between
Austria and Serbia, which lasted,
with a seven months’ interval,
from 1906 to 1911, was partly caused by Austria and France
competing to supply Serbia with war materials. In January 1912,
Paul Deschanel stated in the Chamber of Deputies that from 1908
to 1911 French firms had supplied war materials to Serbia to the
value of 45 million francs.

A report from the Austro-Hungarian Consul at San-Paulo (Brazil)
states: “The Brazilian railways are being built chiefly by
French, Belgian, British and German capital. In the financial
operations connected with the construction of these railways the
countries involved stipulate for orders for the necessary
railway materials.”

Thus finance capital, literally, one might say, spreads its net
over all countries of the world. An important role in this is
played by banks founded in the colonies and by their
branches. German imperialists look with envy at the “old”
colonial countries which have been particularly “successful” in
providing for themselves in this respect. In 1904, Great Britain
had 50 colonial banks with 2,279 branches (in 1910 there were 72
banks with 5,449 branches), France had 20 with 136 branches;
Holland, 16 with 68 branches; and Germany had “only” 13 with 70
branches.[4]
The American capitalists, in their
turn, are jealous of the English and German: “In South America,”
they complained in 1915, “five German banks have forty branches
and five British banks have seventy branches.... Britain and
Germany have invested in Argentina, Brazil, and Uruguay in the
last twenty-five years approximately four thousand million
dollars, and as a result together enjoy 46 per cent of the total
trade of these three
countries.”[5]

The capital-exporting countries have divided the world among
themselves in the figurative sense of the term. But finance
capital has led to the actual division of the world.

[5]The
Annals of the American Academy of Political and Social
Science, Vol. LIX, May 1915, p. 301. In the same volume on
p. 3.31, we read that the well-known statistician Paish, in the
last issue of the financial magazine The Statist,
estimated the amount of capital exported by Britain, Germany,
France, Belgium and Holland at $40,000 million, i.e., 200,000
million francs.
—Lenin